DETROIT — Attorney and Moratorium Now activist Jerry Goldberg says he and Emergency Manager Kevyn Orr are largely in agreement: It is bank debt that is causing the city’s financial crisis. How the debt is dealt with is where they differ.

“We challenge the legitimacy of the debt,” Goldberg said, “while Orr is mandated under the law to pay the banks. He’ll do that by selling off assets, including the art in the DIA, the Water Department, pensions, Belle Isle. It’s all up for grabs.”

Goldberg made the remarks to about 40 citizens at a meeting convened May 29 at Central United Methodist Church to strategize protests for Orr’s planned town hall meetings.

Orr presented a financial stability report May 13, and under the new emergency manager act, Public Act 436, he must present his plans to the public within 30 days.

He has until June 12 to hold a public meeting. No meetings were held or announced by press time.

“Orr’s report covers up the fact that these same banks who now claim first lien on the city’s tax dollars are in large part responsible for the economic destruction of the city,” Goldberg said. “The banks drove 237,000 residents out of the city through the foreclosure of approximately 100,000 homes between 2005-10, which was a product of their racist, predatory lending policies.”

Those attending the meeting represented a wide array of community organizations, and each reported on the actions of their groups in trying to educate the community, raise consciousness and resist the imposition of emergency management.

Some remarked how the Kwame Kilpatrick case has too many Detroiters focused on what local corporate media keeps harping on as “local corruption,” when it is Wall Street that has trapped not only Detroit but also many cities in predatory municipal loans called pension swaps.

Moratorium Now explains that the “fraudulent bond deals” are crippling Detroit. The city is paying the banks a fixed interest rate of over 6.3 percent a year on the pension swaps.

For the banks, the actual interest rate for the bonds is, as of April, 0.57 percent — less than one percent. The difference between these two rates, what the city pays and what the bank pays, is about $100 million a year, according to a study by the Service Employees International Union (SEIU).

“That amounts to profit off our tax dollars for the same banksters who destroyed our city,” Goldberg said. “Without this swap robbery, there would be no deficit.”

“The real corruption was created by Wall Street, implemented by Wall Street on the municipal level,” said attorney Vanessa Fluker.

“Their solution is privatization, turning the city from 70 percent homeowners to 69 percent renters,” she said.

Tom Stephens announced that the Detroit Self Governing Council has painted, refurbished and is using a Democracy Bus to leaflet the neighborhoods and talk to residents about the crisis and how they can get involved.

It was agreed that the Moratorium Now! Coalition will rally outside Greater Grace Church on June 6 at 5:30 p.m.

“We urge the entire movement against the emergency manager to join us there on Thursday and to stay on the alert for an announcement confirming the time and location of the public informational meeting early next week,” Goldberg said.

He urged people to visit the Web site www.moratorium-mi.org for further information. There is also a hotline set up at 313.744.7912 to confirm the time and place of the demonstration to confront Orr at his public informational meeting.

ISDA Master Agreement

The ISDA master agreement is the most commonly used master contract for OTC derivative transactions internationally. It is used to govern many of the financial transactions between the City of Detroit and Wall Street. Below are links to the agreement and sites with explanations.